Rezko gavel-to-gavel: Week 2

Tribune staff reporter

Rezko rewind. Day 8March 14, 2008; 5:13 a.m.

A hospital lobbyist testified at the Tony Rezko corruption trial that he feared the friend and fundraiser of Gov. Rod Blagojevich would turn a hospital regulatory board against his clients. So Jeff Ladd, the lobbyist, got his clients to hire a friend of Rezko's for $80,000 to try to keep Rezko off their backs.

As prosecutors portrayed Rezko as a powerful fixer who controlled the panel from behind the scenes, defense lawyers induced two board members into acknowledging that Rezko had never asked them to vote any particular way on a hospital project before the board.

The defense strategy is shaping up to pin the blame for board manipulation on Stuart Levine, the vice chairman of the panel who Rezko's lawyers contend conned others on the board to do his bidding by implying his marching orders came from Rezko.

The government says Rezko and Levine tried to extort millions from firms seeking state business or regulatory approval, and Levine has pleaded guilty in the case and will testify against Rezko. The trial is in recess until Monday, when Ladd continues his testimony.

Ladd told the jury late in the afternoon that he eventually recommended that his clients hire Ed Kelly in an attempt to influence Rezko on matters before the health planning board.

Kelly was paid a total of $80,000 by Ladd for his services.

Ladd said he was stunned when his friend Thomas Beck, the board chairman, called him the night before the April 2004 vote on the proposed new hospital in Crystal Lake.

Beck told him the proposal by Mercy Hospital would pass the next day, Ladd testified. Ladd represented Centegra Health Systems, which opposed the Mercy proposal.

Ladd said he immediately called Kelly "to ask him if he'd had any conversation with Mr. Rezko."

Kelly said he hadn't, Ladd said. Ladd testified that he asked Kelly to call Rezko and find out what was going on.

Kelly didn't reach Rezko until the next day, just before the vote, Ladd said. But Amy St. Eve, the judge presiding over the trial, barred Ladd from going into the substance of the conversation between Kelly and Rezko. But based on the substance of that conversation, Ladd said, his clients chose to continue to employ Kelly.

Near the end of the trial day, Ladd was cross-examined by Rezko's lawyer, Joseph Duffy, who asked him if he was familiar with the term "lobbyist."

"With a capital 'L' or a small 'L'?" answered Ladd, drawing chuckles in the courtroom.

Ladd acknowledged he had been a registered lobbyist -- the capital 'L' kind -- and someone like Ed Kelly might be the small 'L.'

Duffy was walking Ladd through his political history when the judge decided to break for the day.

There will be no testimony at the trial Friday. Amy St. Eve told jurors to return Monday morning.

The government has called Jeffrey Ladd, former chairman of Metra, to the witness stand to testify under a grant of immunity from prosecution.

Assistant U.S. Atty. Reid Schar asked Ladd to explain that, and Ladd said it meant he has to tell the truth.

"If I do then, there isn't anything coming out of this matter for which I can be prosecuted," Ladd said.Ladd, a lawyer who often represents health-care interests, told the jury he learned from Thomas

Beck, then-chairman of the health planning board, that Rezko had recommended a majority of the board to their posts in 2003.

Ladd testified he then asked Beck if he knew "anybody close enough to Rezko who he [Rezko] would listen to" on matters before that board.

Beck recommended Ed Kelly, former head of the Chicago Park District, Ladd said. That corroborated earlier testimony by Beck.

Ladd also said he reached out to have a meal with Levine and then with Rezko, likening his efforts to scouting expeditions.

In both instances, he said, he wanted to get an understanding of their interest in upcoming projects before the planning board.

In 2003, Ladd was representing Centegra, which opposed the Mercy Hospital proposal to build a new hospital in Crystal Lake. Ladd also represented Rush-Copley, which opposed an Edward Hospital plan for Plainfield.

Doctor on board votes as toldMarch 13, 2008; 3:09 p.m.

Dr. Imad Almanaseer is on the witness stand this afternoon, testifying about his links to Antoin "Tony" Rezko and his time on the Illinois Health Facilities Planning Board.

Almanaseer, a top pathologist at Advocate Lutheran General Hospital in Park Ridge, has told prosecutors he met Rezko in the 1990s and was an investor in his fast-food businesses.

Almanaseer was appointed to the planning board in 2003 on Rezko's recommendation. Prosecutors contend he became part of a five-member voting bloc on the board that followed Rezko's wishes.Almanaseer said board Chairman Thomas Beck tried to steer his voting.

"He said, 'If you just don't know which way to vote, vote the way Mr. Levine votes because that's the way Tony would want the vote to go," Almanaseer recalled, referring to Stuart Levine.

Beck later went as far as handing him an index card with voting instructions on it, he said.

After the lunch break, prosecutors had Almanaseer detail the controversial Mercy Hospital vote in 2004.He said Beck told him before the meeting that he should vote "yes" on the proposal.

Almanaseer said he was confused, so he tried to call Rezko, thinking he had missed something in the Mercy submission, which did not have the endorsement of state Public Health Department staff.

When the voting began, Almanaseer said he first passed on the vote, wanting to see how it would go. He was then shocked when Beck and Levine whispered to each other. Then Levine walked over to him.

"I was very embarrassed by him coming toward me," Almanaseer said.

Levine whispered to him that Beck wanted him to vote, Almanaseer said.

"I was just so embarrassed I wanted him to get back to his seat, I said, 'Fine, I'll vote,' " he told the jury.On cross-examination, Almanaseer told Rezko's lawyer, William Ziegelmueller, that Rezko never directly told him to do anything.

"Mr. Rezko never asked you to vote one way or the other?" Ziegelmueller asked."That's true," Almanaseer answered.

Almanaseer also told Ziegelmueller that he considered the instructions Beck gave him to be recommendations from Rezko, as opposed to direct orders.

Witness contradictions allegedMarch 13, 2008; 12:57 p.m.

Tony Rezko's lawyer, Joseph Duffy, is highlighting contradictions between what Thomas Beck, former chairman of the Illinois Health Facilities Planning Board, told federal agents in interviews in 2006 and potentially damaging statements he made about Rezko on the stand earlier in the trial.

On Wednesday, Beck testified that he spoke to Rezko by cell phone just before a controversial April 21, 2004, meeting of the hospital board at which a Rezko-linked bloc of voters pushed through approval for a new Mercy Health System hospital in Crystal Lake.

In his testimony, Beck said he told Rezko he still had qualms about the project and that Rezko said it was good and told him "to do what you have to do." Beck took that as an order to back the Crystal Lake hospital project. Prosecutors claim Rezko and board member Stuart Levine rigged the vote on Mercy's plan to get kickbacks from a contractor hired to build the hospital.

But Duffy pointed out that over the course of several interviews with federal agents in 2006, Beck did not say that he had threatened to resign over the vote in the phone call with Rezko as he had claimed on the stand Wednesday. In his questioning of Beck, Duffy is trying to suggest that Levine was the mastermind of all the pressure to push for a vote on the hospital, not Rezko.

Beck acknowledged that in the run-up to the vote, Levine called him several times to discuss passing the proposal, but he spoke with Rezko only once before the pre-meeting phone call. Rezko did not even return one of his calls, Beck said. The point of all this is to telegraph to the jury that this wasn't a high-priority matter for Rezko but it was for Levine.

Defense paints history of cloutMarch 13, 2008; 11:03 a.m.

Thomas Beck, former chairman of the Illinois Health Facilities Planning Board, is back on the stand, and Tony Rezko's lawyer, Joseph Duffy, is continuing questioning that is designed to paint board activities as loosey-goosey but hardly sinister.

On Wednesday, Beck had testified that he had gone to Rezko armed with a $1,000 campaign donation for Gov. Rod Blagojevich when he sought to be reappointed to the hospital panel.

On Thursday, Duffy is using Beck to show that political sponsorship for board appointments is the norm and predated Blagojevich coming on the scene. Rezko is a friend and fundraiser for the governor, and Beck testified Wednesday that he considered Rezko his conduit to the administration on board matters.

Beck said he was first appointed to the hospital board, when Republican Jim Edgar was governor, through the intervention of his friend Jeff Ladd, then the chairman of Metra, the suburban rail agency.

Ladd is also a lawyer who has long represented hospitals seeking board approval for projects. As chairman, Beck was forbidden under state law to talk to Ladd about board business, but Beck acknowledged that he did. That's one reason why Beck struck a deal with prosecutors to testify under a grant of immunity from prosecution.

Rezko rewind. Day 7March 13, 2008; 5:04 a.m.

Prosecutors at the Tony Rezko corruption trial played the first in a series of government wiretaps capturing talk of Rezko's influence over state boards that the government claims he manipulated to extort kickbacks.

The focus Wednesday was on Rezko's alleged control over decisions of the Illinois Health Facilities Planning Board, which has power over hospital expansion projects throughout the state. Witnesses said Rezko, a friend and fundraiser of Gov. Rod Blagojevich, controlled a majority bloc on the board.

The former board chairman, Thomas Beck, testified under a grant of immunity that Rezko pressured him in 2004 to push through approval for construction of a new hospital in Crystal Lake that state public health experts had concluded was unnecessary.

The government claims Rezko and hospital board Vice Chairman Stuart Levine had worked out a deal to get kickbacks from a contractor hired to build the hospital if it was approved. The wiretaps played Wednesday captured conversations between Beck and Levine plotting to satisfy Rezko's wishes and win board approval for the hospital. For complete coverage, .

A matter of cloutMarch 12, 2008; 5:25 p.m.

Before the trial ended for the day, Rezko's lawyer, Joseph Duffy, tried to show that Rezko didn't have as much clout in Illinois government as prosecutors contend.

Beck said the Illinois Health Facilities Planning Board needed staff badly, so he went to Rezko, whom he considered his link to the Blagojevich administration.

"He seemed to be the only one listening to me," Beck testified. But staffing never improved, he said.

The wiretaps backed up Beck's claim, Duffy suggested. In a call on April 20, 2004, Levine and Beck discussed the staffing shortage.

"You and I ought to both talk to Tony about that and tell him it's making life difficult," Levine could be heard to say on the tape.

Beck responded by saying Rezko already knew because he had been complaining to him. The problem became so severe, Beck said, that he considered issuing a moratorium on new hospital proposals. But Rezko never came through with staffing help, he said.

In answering Duffy, Beck said he considered resigning from the state board post many times because it was such a headache. Beck spends his winters in Palm Desert, Calif., and would sometimes have to fly back to Illinois to handle board matters.

Duffy asked whether it was usually sunny in Palm Desert.

"It was 86 there yesterday when I talked to my wife," Beck said.

Earlier, Beck had testified he brought a $1,000 check for Blagojevich's campaign fund when he met with Rezko in 2003 to ask that he be kept in the board post.

Prosecutors did not publicly disclose who their next witnesses will be, but one is expected to be Jeffrey Ladd, a lawyer who represented health care companies before the board, including Mercy rival Centegra Health System.

Taking care of friendsMarch 12, 2008; 3:55 p.m.

On the stand this afternoon, Beck detailed the controversial vote on the Mercy Hospital proposal.

Beck said he told Levine that day that he wouldn't vote to approve the new hospital sought by Mercy. Levine proceeded to call Rezko on the phone.

Beck said he began to argue with Rezko because two of their mutual friends, Jeffrey Ladd and Ed Kelly, were acting as consultants for a competing hospital group. Beck couldn't see going against them, he told the jury.

"I said, 'You can take this job and shove it,' " Beck recalled telling Rezko. He told Rezko he was going to resign, Beck said.

"[Rezko] said, 'You do what you have to do,' " Beck testified. Beck said he took that to mean that Rezko wanted him to get the Mercy plan approved by the board.

Beck said he relented and told Rezko that if the plan had four votes when it reached him, he would see if he could go along with it.

Beck then recounted the controversial Mercy vote. On Tuesday witnesses described how Beck, Levine and one of their board allies whispered to each other when the initial vote came up one vote short of approval.

Beck on Wednesday said he changed his vote to "yes" after speaking privately to Levine, who in turn whispered to board member Imad Almanaseer, who had initially abstained from voting on Mercy. When Almanaseer changed his vote to "yes," the plan passed with the minimum of five votes.

After the vote, Beck said Levine drove him to Rezko's North Side office to tell him the Mercy plan was approved. Rezko was there meeting with Blagojevich fundraiser Chris Kelly, Beck recalled.

He said he spoke to Rezko briefly, who told him their friends Ladd and Kelly would be taken care of another time. But

Beck said he remained upset.

"I just didn't like the way the whole day went," Beck testified.

Rezko's lawyer, Joseph Duffy, then began his cross-examination, asking Beck whether he had ever accepted a bribe while in public office, or if Rezko had offered him one. Beck answered "no" to both questions.

Duffy also asked about how things worked on the planning board under other administrations, as Beck was first appointed to the board by Gov. Jim Edgar in the 1990s. Beck said he recalled that the board's chairman at the time would sometimes tell other board members when an agenda item was of interest to the Edgar administration.

'Vote "no" now and then'March 12, 2008; 2:40 p.m.In another recording played for the jury after lunch, Thomas Beck, then-chairman of the state Health Facilities Planning Board, and Stuart Levine, the board's vice chairman, can be heard discussing the Mercy Health System's plan before the controversial vote on April 21, 2004.

Levine told Beck he thought Mercy would be able to address the shortcomings in its plan at the meeting, but Beck still had some concerns about appearances.

Beck told Levine that their "good friend," a reference to Rezko, advocated covering their tracks as a voting bloc.

"I'd like everybody to vote 'no' now and then, so it doesn't look like there's the five, the clique," Beck quoted Rezko as telling him.

'I got the marching orders'March 12, 2008; 1:36 p.m.

The first wiretap recording of what is expected to be many was played in court and it gave the most explicit indication yet of how Antoin "Tony" Rezko allegedly controlled the hospital board through members he had gotten Gov. Blagojevich to appoint.

Though the board had rejected Mercy Health System's application to build a hospital in Crystal Lake in December 2003, the matter was up for reconsideration at a meeting on April 21, 2004. Thomas Beck, then-chairman of the state Health Facilities Planning Board, testified that he talked to Rezko about the issue April 19. Beck said he then called Stuart Levine, the board's vice chairman, to relay what Rezko wanted. The FBI was listening in.

"I got the marching orders," Beck said to Levine. " Our boy wants to help them."

Beck suggested to Levine that they could delay the vote on Mercy and give the hospital group more time to "clean up" its application to overcome staff objections. But Levine repeatedly asked whether the application could be fixed and immediately approved in 48 hours.

Then Beck said, "If we did something Wednesday, everything we have in front of us says it should be turned down."

Beck stressed that the Mercy proposal had generated a lot of controversy in McHenry County where competing hospitals said it was unnecessary. Beck told Levine that they needed to back up a vote for the project with some rationale.

"We want some cover," Beck told Levine, later adding that he didn't want himself and the rest of the Rezko bloc on the planning board "sitting out on a limb."

Before the wiretap was played in court, Beck testified that he would routinely call Rezko a day or two before board meetings to hash over which projects Rezko cared about. Beck told the jury he took that to mean which projects the Blagojevich administration had an interest in.

Beck said he went through the plan for each meeting with Levine before it began "because Stu told me he never read anything [board materials] he received."

Beck said he would write out cryptic instructions on index cards about how Rezko wanted the board to act on agenda items and then he would hand out the cards to three doctor friends of Rezko's that had been installed on the board.

"I would say, 'these are of interest to our friend,' " said Beck, adding that the friend was Rezko.

Board seat retained with $1,000 checkMarch 12, 2008; 11:42 a..m.

Thomas Beck, the former chairman of the hospital regulatory panel at the center of the government's case against Antoin "Tony" Rezko, is now on the stand and his testimony could be used as a primer about how things often get done in Illinois politics.

Beck, who once was the comptroller of Cook County, said he was the cousin of former Chicago Park District head Ed Kelly, a Democratic power broker in the 47th ward.

Beck said Kelly introduced him to Rezko 13 or 14 years ago at a fundraiser for a Kelly-sponsored youth group. They lunched occasionally after that.

Fast forward to July 15, 2003, when Gov. Rod Blagojevich was revamping the hospital board on which Beck held a seat for several years. Beck said he wanted to stay on the panel so he called on Rezko at his North Side office. He came armed with a $1,000 check for Blagojevich's campaign fund. Beck said he asked Rezko to put in a good word for him and Rezko said he would see what he could do.

A few weeks later, Beck said Rezko called him with the good news that he would be reappointed to the board along with Stuart Levine and another holdover member. Rezko also said three doctor friends of his were going to be put on the revamped panel by Blagojevich, Beck testified.

"I told him I have no objection as long as Stu attends the meetings," Beck said. "He had a bad habit of not showing up to too many meetings."

Beck said he first met the three doctors at the new board's first meeting in mid-August 2003. He introduced himself and told them, "I believe we have a mutual friend in Tony Rezko, and they said, 'Oh yes, Tony is our friend,' " Beck said.

Levine's phones tappedMarch 12, 2008; 11:11 a..m.

Key to the government case are dozens of recorded wiretap conversations on three phone lines into the home of Stuart Levine, the former member of two state boards whom prosecutors say worked with Antoin "Tony" Rezko to rig decisions of those panels.

FBI Special Agent Daniel Cain, the primary case agent on the investigation into Levine and Rezko, is on the stand now in testimony that is laying the foundation for entering the wiretaps into evidence.

Cain said the investigation, dubbed Operation Board Games by the federal agents, began in December 2003 and was prompted by information gleaned from an informant whom he did not identify. That witness, he said, took part in meetings with two other individuals who were in contact with Levine by phone at his home.

Cain said Levine had three phone lines in his North Shore home. Federal agents recorded conversations on those lines April 8-May 21, 2004. Those dates span the time when Levine, Rezko and others allegedly were working to rig the hospital board vote on a Mercy Health System hospital proposal for Crystal Lake and other kickback schemes prosecutors claim they were engaged in.

In addition to Levine, Cain said Rezko and several other figures in the case were captured on the tapes. The list includes William Cellini, the Republican power broker who the government says is a co-schemer in the case but has not been charged.

Prosecutors also say Christopher Kelly, Gov. Rod Blagojevich's former chief fundraiser, was captured on the tapes.

Witness granted immunity from prosecutionMarch 12, 2008; 10:07 a..m.

Before Wednesday's testimony in the Tony Rezko corruption trial began, U.S. District Judge Amy St. Eve granted immunity from prosecution to Thomas Beck, the former chairman of the Illinois Health Facilities Planning Board, in exchange for his testimony.

Beck is expected to testify later Wednesday at which time the government also will play wiretap recordings of phone conversations between him and other figures in the case.

On Tuesday, the planning board's lawyer testified about a controversial April 2004 meeting of the panel during which it approved a plan to build a new hospital in Crystal Lake. Prosecutors say Rezko arranged to rig the vote in a scheme designed to extort kickbacks from the contractor who would build the hospital.

The board lawyer, Anne Murphy, said when the vote looked like it might go the wrong way for the hospital, she witnessed Beck, Vice Chairman Stuart Levine and board member Imad Almanaseer engage in a series of whispered conversations before Almanaseer changed his vote in favor of the project. The government contends Rezko pushed the administration of Gov. Rod Blagojevich to put all three on the hospital regulatory panel.

On Wednesday, Beck told St. Eve that without the immunity grant he would have invoked his 5th Amendment protection against self-incriminating testimony. He said he understood that immunity now compels him to testify truthfully.

Testimony now has resumed with Murphy still on the stand under questioning from Rezko lawyer Bill Ziegelmueller.

Rezko rewind. Day 6March 12, 2008; 4:44 a..m.

Witnesses testified about one of the alleged shakedown schemes prosecutors hope to pin on Rezko--a rigged 2004 vote at a state regulatory board panel to give the green light for a new Mercy hospital in Crystal Lake.

The government claims Rezko lined up several confederates on the board to back the hospital even though the same panel had earlier rejected the facility as unnecessary. Board chairman Thomas Beck and Vice Chairman Stuart Levine interrupted the voting when the outcome was in doubt, taking a break to whisper to each other out of earshot of spectators, witnesses said.

Then Levine whispered into the ear of another board member, who promptly changed his vote and lock in approval for Mercy.

Even so, the hospital was never built. But prosecutors say Rezko and Levine wanted it approved because they had cut a deal to get kickbacks from the contractor Mercy had hired to build it. Beck is expected on the stand Wednesday, testifying under a grant of immunity, and prosecutors are expected to play the first of many wiretap recordings capturing key figures in the case.

The former lawyer for a state board that regulates hospital expansions took the stand late in the afternoon and said she told Stuart Levine of her concern after an odd vote on the Mercy Hospital project that included Levine whispering to other board members before the project was approved.

His response was no less troubling, she said.

"He shrugged his shoulders and said, 'Sometimes you have to be a good soldier,'" said Anne Murphy, the former lawyer for the Illinois Health Facilities Planning Board.

Murphy said Levine's remark followed a vote that saw the plan for a new hospital in Crystal Lake squeak by with the minimum of five votes in favor on the nine-member board.

With eight members present at the April 2004 meeting, Murphy said the vote was stalled with three members voting "yes," two voting "no" and two abstentions when Chairman Thomas Beck was called to give his vote.

Beck said, "Where're we at?" Murphy testified. He then went over to whisper with Levine off the record, she said. When that conversation ended, Murphy said, Levine got up and whispered to Imad Almanaseer.

Beck then voted yes, Murphy testified, and Almanaseer changed his vote to "yes," giving the plan the necessary votes to pass.

"There was an audible, collective gasp across the room," Murphy recalled of the April 2004 meeting.

Prosecutors contend the five members who voted for the hospital were a Levine-led bloc that Rezko had placed on the board and controlled. The two were charged with arranging to accept a kickback from the builder who was going to build the Mercy project in Crystal Lake.

The entire board was new as of the summer of 2003, Murphy said. She said she had given the new members memos on ethics, including conflicts of interest.

The jury was then sent home for the day. Beck is expected to testify Wednesday under immunity from prosecution.

Ziegelmueller still has Jones on the stand and has asked him about his earlier testimony in which he described seeing Levine whisper into the ear of a fellow board member during the vote on the Mercy Hospital project.

This morning, Jones said he witnessed Levine whisper into the ear of Dr. Imad Almanaseer, a board member nominated to his post by Rezko. Almanaseer then changed his vote and allowed the controversial hospital plan to go ahead.

Ziegelmueller asked whether Jones specifically meant he was surprised to see two board members whispering off the record. Jones said that was right.

"Did that shock you?" Ziegelmueller asked.

"I had not seen that before," Jones answered.

Rezko's defense is taking every chance it can to place the bulk of the scheming in the case on Levine.

Ziegelmueller asked whether Rezko had ever put any pressure on Jones or his staff in the health department over the Mercy plan, and Jones said Rezko did not.

Had Jones ever even seen Rezko before he walked into court Tuesday?

"No," Jones said.

Hospital was needed, defense tries to showMarch 11, 2008; 2:11 p.m.

With the lunch break over, the defense is continuing its protracted cross-examination of Donald Jones, walking him through the entire application that Mercy Health Systems submitted to build a new hospital in Crystal Lake.

Antoin "Tony" Rezko's attorney, William Ziegelmueller, has had Jones look at support letters, community petitions and other documents submitted to the Illinois Health Facilities Planning Board. Some were from public officials and legislators.

It may look like a four-corners drill or a filibuster, but the move seems to have a point. Rezko's lawyers want to show the hospital project was legitimate and had actual community support.

It's part of a continuing defense strategy to normalize Rezko and his political activities as well as to let the jury know the Mercy project wasn't a sham in which Rezko and Stuart Levine conspired to have a hospital built that no one wanted.

An awkward moment for defenseMarch 11, 2008; 11:53 a.m.

There's an old adage in the legal profession about lawyers never asking a question they don't already know the answer to. But sometimes, even when they do know the answer they think a trial witness will give, it doesn't necessarily come out right.

One of those brief awkward moments came just before the lunch break at the Tony Rezko corruption trial, as defense attorney Bill Ziegelmueller was questioning a state public health official about a hospital construction proposal key to the criminal case against Rezko.

Prosecutors contend Rezko and Stuart Levine, a member of a state hospital regulatory panel, rigged a vote on the panel to get approval for a controversial new hospital in McHenry County in 2004. The aim was to extort kickbacks from the contractor who would build the hospital, the government claims.

On the stand Tuesday is Don Jones, a state public health official who reviewed the application for the proposed Mercy Hospital and found it lacking.

Ziegelmueller spent much of the morning trying to show that there was wide support for construction of the facility in fast-growing McHenry County.

He asked Jones if he had received letters in support of the project from Blagojevich administration cabinet officials, and Jones could remember only one. That was from Jack Lavin, the head of Blagojevich's economic development agency. Leaving it there was potentially embarrassing for the defense because Lavin's previous job before joining the administration had been working for Rezko.

Ziegelmueller then had to show Jones copies of letters from three other Blagojevich cabinet officials to refresh his memory that they, too, had supported the Mercy bid.

Before heading off for lunch, prosecutors disclosed whom they plan to question in the afternoon. Among the witnesses who could reach the stand are an FBI agent who handled the investigation of Rezko and Levine as well as Thomas Beck, former chairman of the hospital board who was recorded on wiretaps talking to Levine and allegedly relaying a message from Rezko.

Levine influences hospital voteMarch 11, 2008; 11:53 a.m.

The end of the Mercy Health System's hospital saga involved something Donald Jones testified that he hadn't witnessed in the more than 100 hospital planning board meetings he had attended in his capacity as a hospital project reviewer for the Illinois Department of Public Health.

After first seeing its application for a new Crystal Lake hospital rejected, Mercy Health System pressed for reconsideration from the board and got it in April. Jones was on hand to answer questions.

Approval for construction required five votes from the nine board members. When the question was first called, there were only four "yes" votes. Dr. Imad Almanaseer, a Tony Rezko nominee for the board, had passed on voting.

Then, said Jones, "[Board Vice-Chair] Stuart Levine got up from his seat and went over to Dr. Almanaseer and whispered into his ear."

Almanaseer then voted "yes," and Mercy's project was approved, the first new hospital project approved in Illinois in more than a quarter century.

Prosecutors contend Levine and Rezko wanted the hospital because they had cut a deal to take kickbacks from Jacob Kiferbaum, the contractor who was to build the facility.

Jennifer Thomas, a former aide to Gov. Rod Blagojevich's patronage chief Joe Cini, continued on the stand Tuesday morning and gave a few more insights into those regular Monday morning meetings she and Cini held in 2003 with Antoin "Tony" Rezko at his office.

She said the meetings lasted a little longer than she let on in Monday's testimony. They began in spring 2003 and continued through November, though on several Mondays they were called off because of scheduling conflicts.

Thomas said she typically brought along spreadsheets of openings for board and commission positions to show Rezko what posts might be available and he often had nominees to suggest. She said they also discussed candidates for state jobs at those meetings.

Thomas said Rezko floated the names of several people to sit on the Illinois Health Facilities Planning Board, which the government claims Rezko corrupted with the help of board member Stuart Levine. And Thomas said Rezko at one point made it clear that he wanted to see Levine reappointed to the panel, which was being overhauled by the governor in 2003.

After Thomas finished testifying, prosecutors began questioning an official of the state Public Health Department as they bored in on a controversial hospital deal they say Levine and Rezko manipulated to extort kickbacks from Mercy Health Systems, which wanted to build a new hospital in Crystal Lake.

Donald Jones, section chief for the public health arm that reviews hospital projects, said experts at the agency found Mercy's application lacking on several counts. It was too close to other hospitals, which already had too many empty beds and services that weren't fully utilized. Jones said Mercy's application failed to meet nine of 18 criteria set up for establishment of a new hospital.

Armed with that analysis, the planning board rejected Mercy's application in December 2003. That wasn't unexpected because the last time state regulators allowed construction of a new hospital in Illinois was in the 1970s, Jones said.

But Mercy asked the board to reconsider its action, and that's where the story involving Levine and Rezko and the hospital gets messy. At that point in Jones' testimony, U.S. District Judge Amy St. Eve called for a mid-morning break.

Defendant's new lookMarch 11, 2008; 9:49 a.m.

A few housekeeping odds and ends we've been meaning to get around to: That picture of corruption trial defendant Antoin "Tony" Rezko at the top of this page is out of date. His mustache is gone.

In January, U.S. District Judge Amy St. Eve deemed him a flight risk and ordered him held at the federal jail in the Loop through the trial. U.S. marshals don't bring him into court through a public entrance, and there are no cameras allowed in the courtroom, so right now we can't get a fresh photo. We apologize.

Rezko's lawyers Monday showed blowups of questionnaires that all candidates for board and commission posts with the state were required to fill out. One question was this:

"Is there anything in your background which if made public would cause embarrassment to Gov. Blagojevich?"

By the way, Stuart Levine, a former member of two boards who has pleaded guilty in the case, answered "no" to that question.

Rezko rewind. Day 5March 11, 2008; 4:59 a.m.

Monday was Clout Day at the Tony Rezko corruption trial. Prosecution witnesses testified that they would get orders to drop everything and fast-track recommendations for appointments to state boards and commissions when they were made by Rezko, a friend and fundraiser of Gov. Rod Blagojevich.

One aide to Blagojevich patronage chief Joe Cini said she and Cini had a standing weekly appointment in the spring of 2003 with Rezko to discuss board picks and state hires. Rezko's lawyers sought to downplay the significance of his recommendations by noting that a wide array of politicians and political insiders also pushed candidates for state boards in a practice that was deeply engrained in the political culture of Illinois.

Testimony resumes at 9:15 a.m. with the Cini aide, Jennifer Thomas, on the stand for a second day.

Ex-Blagojevich patronage aide testifiesMarch 10, 2008; 5:37 p.m.

The trial has ended for the day but not before the government briefly questioned Jennifer Thomas, a former assistant to Joe Cini, Blagojevich's onetime patronage chief.

From February 2003 to March 2006, Thomas worked in the office of Intergovernmental Affairs. She said she and Cini would meet on Monday mornings to discuss openings on state boards and commissions as well as state jobs.

Resumes of applicants flowed into Cini's office from insiders such as Rezko and Chris Kelly, Blagojevich's former chief fundraiser, she said.

She knew Rezko was important, she testified, because Cini would sometimes tell her to stop what she was doing when something came in from Rezko.

Cini would say "it was from Tony and that it was important," Thomas testified.

The defense is continuing its effort to make Rezko's political activities look as routine as possible, asking Hayden who else recommended various candidates for state boards.

Ziegelmueller, Rezko's lawyer, is concentrating on the Teachers Retirement System board and why a number of candidates were or weren't appointed.

The Rezko defense asked Hayden about the questionnaire that Stuart Levine filled out when he was seeking a post on the teachers pension board.

Levine did not list Rezko as a reference, Ziegelmueller pointed out. The lawyer asked Hayden to review the list of references that appeared in the questionnaire. Those names included that of Jon Bauman, executive director of the teachers pension board.

Levine, expected to be the government's star witness against Rezko later at trial, listed no potential conflicts of interest on the form.

Ziegelmueller then paused on question 17 of the form. It asked whether Levine had been a user of drugs, including marijuana and cocaine.

"He said 'no,'|" Hayden testified.

The defense is expected to make much of Levine's use of illicit drugs such as cocaine and crystal meth, questioning how they impacted his memory of events.

Meanwhile, a cold front seems to have moved through the courtroom, with one juror donning a muffler.

Upstairs in an overflow courtroom, where reporters are watching via closed-circuit TV, it may be even colder. More than one reporter was wearing a winter coat this afternoon, warming their hands on their Blackberrys as they check for the latest updates on the Eliot Spitzer sex scandal.

Hayden quizzed on appointments March 10, 2008; 4:16 p.m.

Hayden returned to the stand after lunch and was cross-examined by Rezko's lawyer, William Ziegelmueller, about records she kept on who was recommended to fill hundreds of seats on state boards and commissions.

Prosecutors earlier had Hayden point out for the jury the times she had put Rezko's initials--TR--beside the names of board candidates being considered for board posts. Rezko made a number of recommendations, according to Hayden's records.

But Ziegelmueller has pointed out that scores of openings were being filled after Blagojevich was elected in 2002 and that many state leaders and friends of the new governor were making recommendations.

Ziegelmueller asked Hayden whether she had any idea if the candidates listed as being recommended by Rezko were his own recommendations or names he passed on for others. She said she didn't know.

House Speaker Michael Madigan, state Sen. Emil Jones, U.S. Sen. Dick Durbin and Democratic political heavyweight David Wilhelm, who had directed Blagojevich's transition team in 2002, were among those making recommendations for the boards and commissions.

Ziegelmueller asked Hayden about a 2003 e-mail exchange with Lichtenstein, then the governor's top lawyer, in which Wilhelm made recommendations for the Illinois Health Facilities Planning Board.

The name of Barack Obama, the Democratic front-runner for the presidential nomination, also appears in the e-mail as a member of a strategic team reviewing hospital board matters with the governor's staff when he was a state senator. The hospital board was scheduled to be revamped in the summer of 2003.

Obama was then chairman of the Senate Committee on Health & Human Services. Other legislative leaders, including Madigan, were part of that review panel as well, according to the e-mail.

' ... It was already a done deal'March 10, 2008; 12:46 a.m.

The government alleges that Antoin "Tony" Rezko and Stuart Levine worked together to try to rig decisions on where to invest tens of millions of dollars in state pension funds. Prosecutors worked Monday to link the two through the testimony of Jill Hayden, the former director of boards and commissions for Gov. Rod Blagojevich.

Levine had been appointed to the teacher's pension fund board by Blagojevich's Republican predecessors, but his appointment expired in 2004. In mid-May 2004, Blagojevich reappointed him. Hayden testified that a few days before that appointment was finalized, she got a call from Rezko urging her to speed things up.

"He called me and he said we need to move on Stuart Levine," Hayden testified. Hayden said Rezko told her he had already spoken to her boss, Blagojevich chief of staff Lon Monk, about the Levine reappointment and been assured the appointment would go through.

Hayden said Rezko laughed when she said she would have to check with Monk herself. "I took that to mean that I could go ahead and ask him, but it was already a done deal," she recalled.

Government filings in the case suggest a reason behind the alleged rush. The government claims that Levine and Rezko were arranging to take kickbacks from investment firms in exchange for pension business that was to be voted on within days of Levine's reappointment.

Hayden also testified that Rezko had at one point sought to have Ruth Rothstein, then the longtime head of the Cook County health system, appointed to the Health Facilities Planning Board, another regulatory panel prosecutors allege Rezko was involved in corrupting.

Rothstein did not meet legal requirements for the post and did not get the position, Hayden said.

Susan Lichtenstein, former general counsel to Gov. Rod Blagojevich, was followed on the stand by Jill Hayden, the former director of Blagojevich's Office of Boards and Commissions. Prosecutors used her testimony to give an inside look at how the administration filled some 1,500 vacancies on state panels that held sway over a wide array of regulatory decisions.

Hayden was in charge of vetting the qualifications of candidates for many of those positions. She said recommendations for appointments came from many sources, including the governor's patronage office. She said that recommendations made by people close to Blagojevich seemed to go through the hoops easier.

Recommendations having the highest success rate, she said, came from Tony Rezko; Chris Kelly, then-fundraising chief for Blagojevich; state Rep. Jay Hoffman (D-Collinsville), a close friend of the governor; and Louanner Peters, a top Blagojevich aide who is now one of his deputy governors.

Hayden said she had conversations with Rezko on five or six occasions about people he was pushing for various board posts.

Defense focuses on e-mailMarch 10, 2008; 10:40 a.m.

Susan Lichtenstein, the former general counsel to Gov. Rod Blagojevich, continued on the stand for a second day, with defense lawyers trying to pick away at a central prosecution claim that Antoin "Tony" Rezko was a kingmaker responsible for key appointments in the Blagojevich administration.

Rezko's lawyer, William Ziegelmueller, questioned Lichtenstein about a series of e-mail exchanges she had concerning appointments in 2003 to the Illinois Health Facilities Planning Board, a hospital regulatory agency Rezko is accused of corrupting.

The government contends that Rezko used his clout with the governor to ensure that Stuart Levine, a Republican holdover on the board, remain on the panel. Levine, who will be the government's star witness against Rezko, has been charged with rigging board decisions and has pleaded guilty in the case.

One of the e-mail exchanges was between Lichtenstein and an associate of David Wilhelm, who ran Blagojevich's 2002 campaign. The e-mail sent in 2003 suggested several appointees backed by Wilhelm for the hospital panel, including Levine.

With the e-mails, Rezko's lawyers appear to be pushing the point that Rezko wasn't alone in backing Levine and that Levine's appointment had a broad array of support.

Ruling in prosecution's favorMarch 10, 2008; 10:10 a.m.

The prosecution won a small tactical victory at the Antoin "Tony" Rezko corruption trial before testimony resumed Monday. Judge Amy St. Eve said prosecutors would be allowed to present testimony suggesting that the administration put up a straw candidate for an important state post to make sure a Rezko nominee got the job.

The agency involved is the Illinois Finance Authority, which was headed by Rezko business associate Ali Ata. He is now under indictment in a separate criminal case in which Rezko also is charged.

Prosecutors said Jill Hayden, former head of Gov. Rod Blagojevich's Office of Boards and Commissions, will testify later in the trial that state law required two candidates be put up for the finance authority job, so the name of a second candidate was floated even though it was her understanding the job would go to Rezko's choice.

Defense attorneys sought to block Hayden's testimony on the second finance authority candidate, contending there was no suggestion that Rezko had anything to do with the alleged administration charade.

If testifying at a high-profile criminal trial isn't stressful enough, think of what it must be like to be Susan Lichtenstein, who will be on the stand when the Tony Rezko corruption trial resumes this morning.

Once she's done on the stand, Lichtenstein, the former general counsel to Gov. Rod Blagojevich, will have to head back to her day job as the top lawyer for Baxter International Inc.. The Deerfield-based pharmaceuticals giant is up to its corporate eyeballs in controversy right now over tainted supplies of the blood thinner heparin, which the government says may have killed 21 people.

This will be Lichtenstein's second day on the stand as a witness for the prosecution as it tries to prove charges that Rezko misused his close ties to Blagojevich in an attempt to illegally siphon millions of dollars from firms seeking state businesses or regulatory approval.

Rezko was a friend of Blagojevich and a major political fundraiser, and before the trial adjourned Thursday for a long weekend, Lichtenstein testified that Rezko appeared to have considerable access to the governor despite holding no official position in the administration.

Rezko sat in on her job interview with Blagovich and also took part in periodic strategy sessions with the governor and his top aides, she said.

Lichtenstein abruptly resigned her state post in June 2004, around the same time federal agents were boring in on scandals at two state boards that led to the grand jury indictment against Rezko.

Lichtenstein's appearance Thursday also led to the funniest moment at the trial to date. Defense attorney William Ziegelmueller began his cross-examination of Lichtenstein with an apology to the court reporter producing the trial transcript for being forced to deal with two long and hard to spell names at the same time.